Russia’s Central Bank has sharply increased its key rate by 1 percentage point to 8.5% per annum, noting reinforced inflationary pressure in the economy.
"On 21 July 2023, the Bank of Russia Board of Directors decided to increase the key rate by 100 basis points to 8.50% per annum. Current price growth rates, including a variety of underlying indicators, have exceeded 4% in annualized terms and are still on the rise. The increase in the domestic demand surpasses the capacity to expand production, including due to the limited availability of labor resources. This reinforces persistent inflationary pressure in the economy," the regulator's statement reads.
The Bank of Russia added that it holds open the prospect of further key rate increase at its next meetings to stabilize inflation close to 4% in 2024 and further on.